conference on ''The Crisis of Neo-liberalism in India:
Challenges and Alternatives'' organised by Tata Institute
of Social Sciences (TISS), Mumbai and International
Development Economics Associates (IDEAs), 13 -15,
Introduction: The context
The current global economic crisis – reflected in
stock market crashes, growth slowdowns, banking crises,
capital flights and large job losses – has indeed
halted the march of neo-liberalism as the dominant
ideology of our times. It marks the end of a phase
in which finance enjoyed historically unprecedented
rights and privileges in deciding economic policy.
The crisis has forced Western governments to intervene,
regulate, and even nationalise financial institutions.
Though the process of financial liberalisation began
much later in Asia than it did in Latin America, recent
decades had witnessed rapid liberalisation leading
to a restructuring of financial sectors in the region.
The first indication that this can have adverse macroeconomic
and welfare effects came with the severe financial
crises that afflicted several South-East Asian countries
in 1997. While these countries have substantially
recovered ground since then, that experience did not
slow the pace of subsequent financial liberalisation.
As a result, financial volatility has been a persisting
phenomenon and has finally culminated in the global
financial crisis, triggered by the sub-prime mortgage
crisis in the United States.
While much has been written on the financial crisis
per se, its effects on the real economy and the mechanisms-international
and domestic-through which those effects are transmitted
are only now being understood. Analysing these processes
and outcomes is, needless to say, crucial to the formulation
of appropriate responses to the crisis globally and
In India, financial liberalisation was the centrepiece
of the larger programme of ''economic reform.'' Much
of the prescriptions of the WC found their echo in
the post-1991 economic reform programme in India.
The programme began with a radical programme of stabilization
and structural adjustment, assisted by the World Bank
and the IMF. Immediate measures of macroeconomic stabilization,
fiscal correction, exchange rate adjustment, monetary
targets and inflation controls were announced. These
stabilization measures were to be supplemented by
structural reform measures, which included industrial
deregulation, liberalisation of foreign direct investment,
trade liberalisation, overhauling of public enterprises
and financial sector reforms. In the initial period,
the liberalization of the agricultural sector proceeded
only slowly. However, over the years, the pace of
reforms in the agricultural sector was also accelerated.
The onset of the global financial crisis provides
an ideal opportunity to discuss the effects of the
new economic regime, with financial liberalisation
at its core, on the real economy, with special focus
on the living and working conditions of the Indian
people. The proposed conference has been conceptualised
with this broad objective in mind.
List of Papers presented in
the Conference (Click the title to download)
Sanjay G. Reddy, -
Paper not received -